ISO group challenges GE/InnoServ deal

An association representing independent service organizations has challenged the plans of GE Medical Systems of Milwaukee to acquire equipment service provider InnoServ Technologies of Arlington, TX. The Independent Service Network International of Atlanta filed a public comment on Sept. 15 in a Washington, DC, federal court, taking issue with the deal just as GE claimed to have finalized the acquisition.

GE announced in April its plan to acquire InnoServ, which provides third-party service for a large number of GE scanners. The U.S. Department of Justice initially opposed the purchase, believing that the acquisition could reduce competition in the multivendor service market. The Justice Department dropped its opposition, however, after reaching a settlement with GE in which the company agreed to sell off InnoServ’s Prevu diagnostic software (SCAN 7/22/98).

GE on Sept. 16 reported that the boards of both companies had approved the deal and that the acquisition was complete. ISNI believes the companies may be moving too quickly, however. The acquisition still must be approved by the U.S. District Court for the District of Columbia, as is the case in all situations in which the federal government offers to settle an antitrust case, according to Ronald Katz, an attorney with Coudert Brothers in San Francisco. ISNI filed its challenge as part of the public comment requirements regarding the case.

ISNI’s comment claims that selling Prevu is no solution for the loss of competition that will occur if the acquisition goes through, and asserts that the Justice Department has not provided enough information on the impact the deal will have on competition for multivendor service. The complaint asks the court to appoint a special master to more fully investigate the impact the deal would have on the market. Katz believes that the court could rule on the comments and pass judgment on the acquisition in the next several months.